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

[RJT1979]

6 hours ago, ThoughtCriminal said:

🙊

Drug addicts looking for one last fix

[Starsend]

1 hour ago, Cattle Prod said:

 

3 meals from anarchy

 

 

 

Crikey that guy did a pretty good job keep running. What was he carrying? Looked like a KFC Bargain Bucket to me, no wonder they were all chasing him.

[HousePriceMania]

1 hour ago, Cattle Prod said:

 

3 meals from anarchy

 

 

 

With the rice I bought it'll be 6 months before I join in, everyone will be dead by then 

[leonardratso]

15 minutes ago, Starsend said:

Crikey that guy did a pretty good job keep running. What was he carrying? Looked like a KFC Bargain Bucket to me, no wonder they were all chasing him.

looked quite chubby, you know, good source of fat spit roasted for the crowd.

[Pip321]

1 hour ago, Castlevania said:

I haven’t a clue as to what’s triggered it. My portfolio composition hasn’t materially changed over the past few weeks, and is arguably more diverse now, unless I don’t have enough UK exposure or something.

 

43 minutes ago, Bobthebuilder said:

I had the email a few weeks ago, I just took it as "you are making too much money out of us, you little shit".

Guys can’t we just accept these helpful guys know what’s best and do whatever they say which in turn helps their profits.

Ps…thanks for your custom…my shares in HL have nudge up nicely since I bought them a few days ago…but every little helps.😉

[Bobthebuilder]

5 minutes ago, Pip321 said:

 

Guys can’t we just accept these helpful guys know what’s best and do whatever they say which in turn helps their profits.

Ps…thanks for your custom…my shares in HL have nudge up nicely since I bought them a few days ago…but every little helps.😉

No problem.

I sold out my SSE holding today, have had them for ages.

Also sold a Shell holding that I bought pre pandemic, flat on that but have my 2020 oillies to keep in me pension.

Trimming up a few things and giving me some beer money.

[snaga]

1 hour ago, HousePriceMania said:

Just been to little and bought 2 huge bags of rice, lasts till 2025.

Just in case you understand

I've still got a big sack of rice I bought Feb 2020. Wife keeps threatening to take it to the food bank.

She's my canary, when she stops threatening I'll know its time to buy more.

[DurhamBorn]

Home Bargains had wholegrain Basmati in for £1.29 bargain for the quality,but havent had any for weeks,iv 2 years worth.Other places brown rice is par boiled,so a third of a bag really of rice,plus lost a lot of nutrients,i wont eat white rice unless im making a fried rice,very low nutrients.

[leonardratso]

not strictly macro, but on muskys adventures in space, makes my work reviews look good;

[Starsend]

57 minutes ago, DurhamBorn said:

Home Bargains had wholegrain Basmati in for £1.29 bargain for the quality,but havent had any for weeks,iv 2 years worth.Other places brown rice is par boiled,so a third of a bag really of rice,plus lost a lot of nutrients,i wont eat white rice unless im making a fried rice,very low nutrients.

Thing to note is that white rice stores pretty much indefinitely if stored correctly, certainly many years. Brown rice I believe is only good for storing for a year or so. I think that's part of the reason it usually comes in much smaller bags.

[wherebee]

2 hours ago, Yadda yadda yadda said:

Their agenda for the middle class, destruction, isn't explained in that White House statement.

Interesting to see a (former) democratic party funder and propagandist fall out with the administration.

Jeff is, I suspect, going to find out why Putin killed oligarchs who got involved in politics.  I am going to add him to celebrity deaths..

[DurhamBorn]

10 minutes ago, Starsend said:

Thing to note is that white rice stores pretty much indefinitely if stored correctly, certainly many years. Brown rice I believe is only good for storing for a year or so. I think that's part of the reason it usually comes in much smaller bags.

Yes thats right,i find about 18 months,white rice is just starch,nothing else.I do use it for fried rice though,iv got that take away standard now,only make it when Lidl have spring onions on for 37p though.

[sancho panza]

On 14/05/2022 at 11:01, kibuc said:

Haha, you're right, I guess I'm a bit defensive right now as for all the tough talk about picking undervalued explorers and rinding them to the moon, this recent carnage left my portfolio dead flat compared to 2018 while more diverse portfolios of DB and the like made a killing, so I don't feel like I'm in a position to preach

I'm on my way to California* for the weekend so I'll provide a review of my portfolio today or tomorrow.

*the one in Norfolk.

It's weird I had a long chat with my Ma on Friday dicssuing where I thought we should deploy in the goldies going forward and I said to her that much as Newcrest looks incredible value for what it is at these levels ie a really solid 2/1 bet, I'd rather be Alexco/Abra/Minera Alamos/SMD/New Gold etc etc for a  [potneital 5/1 bet).

Weird ,as a I normally would always opt for the safeish 2/1 return but having made some profits last year and 2020,effectively being in for free,I wanna feel like I've lived rather than jsut existed.

I have no doubts that come 2030,you'll hve no regreats about how you've run things.The sort of plays we're discssuing here run late and hard.Adn I think with these gold trades it's a marathon not a sprint

On 14/05/2022 at 18:49, M S E Refugee said:

Just watched an online Watch auction today and prices look to have fallen significantly.

I wonder if this could be a Canary in the Coal Mine.

Keep us posted MSER,I think these sort of auctionas are a big indicator  about whre we are.

13 hours ago, kibuc said:

OK, so here's what I've got:

Top 3 positions:

Abrasilver (explorer, silver & gold, Salta Argentina): 90Moz silver + 1Moz gold in an open pit with PEA in place and still expanding, with some spectacular step-out drills recently. C$200mil mcap. As per PEA, NPV changes by $75mil with every $1/oz Ag & $100/oz Au change. Should provide great leverage to PM prices as it is, but I think markets are also asleep about their step-outs, we're talking about widths of 100m and 67m at 300AgEq as far as 800m outside the PEA pit! Surely a takeover target at some point.

Alexco (producer, silver, Canada): it's difficult to talk about them without repeating yourself. Keno Hill ramp-up is behind schedule and the Wheaton deal makes it impossible for them to make money at current prices... which to me makes them a fantastic way to leverage silver, assuming that the mine starts operating to its full potential. They are burning through some serious cash and might have to raise once again but I'm prepared to absorb that as I have confidence in the management to eventually overcome the issues and hit that consistent 400 tonnes per day.

Santacruz (producer, polymetalic - primarily zinc & silver, Mexico & Bolivia): their acquisition of Glencore assets puts them firmly in the mid-tier-trying-to-break-major category but they are priced as an emerging junior. We're talking about a company that will be* churning out 1/2 of First Majestic's pure silver production and 2/3 of AgEq at less then 4% of their mcap.

*forward looking statement! grab your children and run!

Medium positions, in oder of confidence:

Cassiar Gold (explorer, gold, US): 1.4Moz of open-pittable gold and that resource will keep expanding. The management's target is 3Moz which will surely take a lot of doing, but with the upcoming definition drilling this summer I can certainly see 2Moz within the defined pit shell with strip ratio falling down significantly from the current 4.5:1. Mineralistaion starts literally just below the surface. $60mil mcap surely has some digits missing.

Avino (producer, silver & copper, Mexico): their Avino mine is a low-grade open pit operation which they've been trying to expand with varrying success in 2021, and as many low-grade operation it tens to grow in economical ounces and value as the spot price goes up. This one really tends to jump when silver expldoes. However, what truly elevates it above its peers (looking at you, Impact!) is their recent acquisition of La Preciosa -  another 100Moz of almost exclusively silver, which instantly doubles their resources and upps their average grade, too.

Summa Silver (explorer, silver & gold, US): they hit wide high-grade intercepts for fun. Management holds a whooping 30% (retail only 27%). A longer-term play as I'm not expecting any resource estimates until 2023 but this baby is getting taken over at much higher than its current $70mil mcap.

Impact Silver (producer, silver, Mexico): another low-grade open pit... ha! surprise! Impact actually operates 4 mines - 3 of the underground and one open-pit so there's some diversification of risk. A very unusual situation for such a small producer. It's not massively exciting but they simply get work done, don't get in trouble with the locals, get decent hits in expansions drilling and make money, albeit small, at current prices. Oh, and just like Avino, they fly when silver does.

Defiance Silver (explorer, silver, Mexico): used to be my top holding alongside Abra delivering great drills throghout Spring 2021 but then it all went quiet, with only one result reported for the rest of 2021, and not a particularly exciting one at that.  They have, however, started drilling their second target and the first drill reported in April shows promise. This one is living on a borrowed time a little bit, but I knew exactly why I held them in 2021 so I'm prepared to give them a chance to rebound.

What are thoooose?

Guanajuato Silver (producer, silver, Mexico): they came to be after they bought an exhausted El Cubo mine from Endeavour for peanuts. I bought this one completely against my own judgement as I happened to know the asset rather well after following Endeavour for years but there was tons of excitement about it amongs some of the fellow junior investors I follow and it seemed to provide solid leverage to silver. It's priced almost as Avino without getting anywhere near its production and I honestly don't see what should be so special about it, but for now I'm prepared to hold one asset that I don't understand if - and only if! - it works. However, even if it eventually does some magic, it will surely be the first one to go once I decide to start cashing in.

GR Mining (explorer, silver, Mexico): it was one of my speculative plays that seemed to have had not worked out, with narrow intercepts reported in a surprisingly triumphant tone. We were literally on our way to the woodshed with a loaded gun and a bodybag when they pulled out the very best result I have seen, ever (mentioned here the other day). It bought them stay of execution but they'll have to follow up on it, and soon.

Recently sold:

GoGold (producer, silver & gold, Mexico): what a company! A glowing example of how a mining operation should be run - although it always helps if you're sitting on a good resource. 100km (!) of successful drilling in 2021, another 100km this year, they'll soon dig their way to China and it's all funded by cash flow from their Parral operation which just keeps going from strength to strength. I was extremy reluctant to let it go and only decided to do so to take advantage of firesale in Alexco, but I think this one should be a cornerstone of any junior portfolio.

Discovery Metals (explorer, polymetalic, Mexico): another one that I think is just absurd value, their problem was they didn't drop anywhere near as much as some of the others  so I decided to redistribute it among my high-conviction picks. Might go back to that one after Alexco and the like bounce back.

Minaurum Gold (explorer, polymetalic, Mexico): a similar story to GR Mining, where drills were rather underwhelming for some time until it pulled something special in recent weeks. However, their March drill wasn't anywhere near as spectacular as that of GR Mining, their mcap is already 3x higher and someone had to go. Retail seem to like them, tho, and they can be very springy at times - they bounced 16% on Friday.

CopAur (explorer, gold, US): it was another one of my speculative plays on small gold explorers (alongside Cassiar and Grande Portage), but unlike Cassiar this one has never delivered. People seem to be very excited about their recent acquisition of another small explorer in Nevada, New Placer Dome, with 500koz of defined resource, but I'm not. Not at all. I look at them at $40m mcap, then at Cassiar with their consitently good driils and three times the resource at $55m and I have no problem figuring out which one of them is more likely to make it.

There were also some failed speculative minicap plays like Strikepoint, Equity Metals, Canasil or the aforementioned Grande Portage. I'm keeping an eye on them and I think I might even consider taking another look at Strikepoint one day if it reaches single digits in mcap, but the reality is they are in a graveyard where they most likely belong.

 

lot of good reading and ints there K.Apprecaite you putting it out there for free.In all fairness I pay for advice that's now ehre near as good as this.You need your own newsletrer

3 hours ago, Castlevania said:

I haven’t a clue as to what’s triggered it. My portfolio composition hasn’t materially changed over the past few weeks, and is arguably more diverse now, unless I don’t have enough UK exposure or something.

We're up 100% ++ from 2020 adn got teh same.Thye're morons

[JMD]

14 hours ago, kibuc said:

OK, so here's what I've got:

Top 3 positions:

Abrasilver (explorer, silver & gold, Salta Argentina): 90Moz silver + 1Moz gold in an open pit with PEA in place and still expanding, with some spectacular step-out drills recently. C$200mil mcap. As per PEA, NPV changes by $75mil with every $1/oz Ag & $100/oz Au change. Should provide great leverage to PM prices as it is, but I think markets are also asleep about their step-outs, we're talking about widths of 100m and 67m at 300AgEq as far as 800m outside the PEA pit! Surely a takeover target at some point.

Alexco (producer, silver, Canada): it's difficult to talk about them without repeating yourself. Keno Hill ramp-up is behind schedule and the Wheaton deal makes it impossible for them to make money at current prices... which to me makes them a fantastic way to leverage silver, assuming that the mine starts operating to its full potential. They are burning through some serious cash and might have to raise once again but I'm prepared to absorb that as I have confidence in the management to eventually overcome the issues and hit that consistent 400 tonnes per day.

Santacruz (producer, polymetalic - primarily zinc & silver, Mexico & Bolivia): their acquisition of Glencore assets puts them firmly in the mid-tier-trying-to-break-major category but they are priced as an emerging junior. We're talking about a company that will be* churning out 1/2 of First Majestic's pure silver production and 2/3 of AgEq at less then 4% of their mcap.

*forward looking statement! grab your children and run!

Medium positions, in oder of confidence:

Cassiar Gold (explorer, gold, US): 1.4Moz of open-pittable gold and that resource will keep expanding. The management's target is 3Moz which will surely take a lot of doing, but with the upcoming definition drilling this summer I can certainly see 2Moz within the defined pit shell with strip ratio falling down significantly from the current 4.5:1. Mineralistaion starts literally just below the surface. $60mil mcap surely has some digits missing.

Avino (producer, silver & copper, Mexico): their Avino mine is a low-grade open pit operation which they've been trying to expand with varrying success in 2021, and as many low-grade operation it tens to grow in economical ounces and value as the spot price goes up. This one really tends to jump when silver expldoes. However, what truly elevates it above its peers (looking at you, Impact!) is their recent acquisition of La Preciosa -  another 100Moz of almost exclusively silver, which instantly doubles their resources and upps their average grade, too.

Summa Silver (explorer, silver & gold, US): they hit wide high-grade intercepts for fun. Management holds a whooping 30% (retail only 27%). A longer-term play as I'm not expecting any resource estimates until 2023 but this baby is getting taken over at much higher than its current $70mil mcap.

Impact Silver (producer, silver, Mexico): another low-grade open pit... ha! surprise! Impact actually operates 4 mines - 3 of the underground and one open-pit so there's some diversification of risk. A very unusual situation for such a small producer. It's not massively exciting but they simply get work done, don't get in trouble with the locals, get decent hits in expansions drilling and make money, albeit small, at current prices. Oh, and just like Avino, they fly when silver does.

Defiance Silver (explorer, silver, Mexico): used to be my top holding alongside Abra delivering great drills throghout Spring 2021 but then it all went quiet, with only one result reported for the rest of 2021, and not a particularly exciting one at that.  They have, however, started drilling their second target and the first drill reported in April shows promise. This one is living on a borrowed time a little bit, but I knew exactly why I held them in 2021 so I'm prepared to give them a chance to rebound.

What are thoooose?

Guanajuato Silver (producer, silver, Mexico): they came to be after they bought an exhausted El Cubo mine from Endeavour for peanuts. I bought this one completely against my own judgement as I happened to know the asset rather well after following Endeavour for years but there was tons of excitement about it amongs some of the fellow junior investors I follow and it seemed to provide solid leverage to silver. It's priced almost as Avino without getting anywhere near its production and I honestly don't see what should be so special about it, but for now I'm prepared to hold one asset that I don't understand if - and only if! - it works. However, even if it eventually does some magic, it will surely be the first one to go once I decide to start cashing in.

GR Mining (explorer, silver, Mexico): it was one of my speculative plays that seemed to have had not worked out, with narrow intercepts reported in a surprisingly triumphant tone. We were literally on our way to the woodshed with a loaded gun and a bodybag when they pulled out the very best result I have seen, ever (mentioned here the other day). It bought them stay of execution but they'll have to follow up on it, and soon.

Recently sold:

GoGold (producer, silver & gold, Mexico): what a company! A glowing example of how a mining operation should be run - although it always helps if you're sitting on a good resource. 100km (!) of successful drilling in 2021, another 100km this year, they'll soon dig their way to China and it's all funded by cash flow from their Parral operation which just keeps going from strength to strength. I was extremy reluctant to let it go and only decided to do so to take advantage of firesale in Alexco, but I think this one should be a cornerstone of any junior portfolio.

Discovery Metals (explorer, polymetalic, Mexico): another one that I think is just absurd value, their problem was they didn't drop anywhere near as much as some of the others  so I decided to redistribute it among my high-conviction picks. Might go back to that one after Alexco and the like bounce back.

Minaurum Gold (explorer, polymetalic, Mexico): a similar story to GR Mining, where drills were rather underwhelming for some time until it pulled something special in recent weeks. However, their March drill wasn't anywhere near as spectacular as that of GR Mining, their mcap is already 3x higher and someone had to go. Retail seem to like them, tho, and they can be very springy at times - they bounced 16% on Friday.

CopAur (explorer, gold, US): it was another one of my speculative plays on small gold explorers (alongside Cassiar and Grande Portage), but unlike Cassiar this one has never delivered. People seem to be very excited about their recent acquisition of another small explorer in Nevada, New Placer Dome, with 500koz of defined resource, but I'm not. Not at all. I look at them at $40m mcap, then at Cassiar with their consitently good driils and three times the resource at $55m and I have no problem figuring out which one of them is more likely to make it.

There were also some failed speculative minicap plays like Strikepoint, Equity Metals, Canasil or the aforementioned Grande Portage. I'm keeping an eye on them and I think I might even consider taking another look at Strikepoint one day if it reaches single digits in mcap, but the reality is they are in a graveyard where they most likely belong.

 

Thank you Kibuc for your generous reply, really great info. Plus there's so much silver, which for me makes it feel like it's Christmas!!    Btw Is your '3-5-2' spread of holdings intentional? 

[wherebee]

Heads up: If the LIberals win the election in Australia this weekend, one of their policies will be to allow first time buyers to take 50k out of their pension (called superannuation here) to spend on buying a house.  Madness, but popular with the sheep.

If that happens, the outflows from the funds could be material.  That might mean a downwards pressure on Australian shares (as most funds have simple buckets like 'Australian', 'Foreign' etc - complete shit).  The funds may have to sell positions to cover outflows.

Could be a buying opportunity for Australian miners in the next 3-6 months.  DYOR, etc etc.

[Lightscribe]

It looks like HELOC loans could be the catalyst for the real estate crash in the US and Canada which will in turn prick the bubble everywhere else as well as our own BTL here.

https://www.theglobeandmail.com/investing/personal-finance/young-money/article-helocs-have-us-complacent-and-greedy-about-debt-theyre-now-a-defining/
 

“The statistics reflect our addiction: Canadians now owe $168.5-billion in HELOC debt. Borrowers took out $2-billion in HELOCs in February alone, the highest single-month increase since 2012. For most Canadian homeowners, a HELOC is their own personal ATM, funding everything from personal emergencies to family vacations.“

“HELOCs have variable interest rates, which means they are sensitive to interest rate increases by the Bank of Canada. As rates rise, so does your cost of borrowing and your monthly payment. HELOCs don’t require fixed payments that pay down the principal balance, which is one of the reasons their debt burden has not been felt as readily as a car loan or a credit-card bill. Instead, borrowers make interest-only payments and have the option to pay extra if they want to reduce their balance.”

“While the difference between 1 per cent and 2 per cent might seem small, for HELOC borrowers it means their interest-only payments will double. If they used their HELOCs to fund investment properties that have fallen in value, or buy stocks whose prices have collapsed by double digits, then they’re in for even more pain unless they change course.”

I don’t think for one minute we have even begun to feel the reverberations of these loans having been ‘reinvested’ in NFTs/crypto/Tech/FAANGs

 

 

 

That’s not even starting on DSCR loans with no proof of income check required for AirBnBs.

 

[MrXxxx]

20 hours ago, Yadda yadda yadda said:

Iron would be good. As would Brave, Visionary or Principled. Wishy washy Rishi is a rabbit in the headlights.

Try 'Invertebrate' i.e. spineless, as that covers the majority of politicians we have nowadays.

[harp]

IMB 

[Boon]

That HELOC stuff is frightening really. 

I know we have it here, but much like the NINJA mortgages pre-GFC surely nothing on the same scales.

[DurhamBorn]

Remember on telcos i said the number to watch was Return on Capital Employed,thats the key number because it shows prices are rising above coupons on their debt,so returns flow to equity,well VOD had this buried in todays results,just what i wanted to see,

Strong step up in pre-tax ROCE of 1.7 percentage points to 7.2%,

[Democorruptcy]

1 hour ago, harp said:

IMB 

Just been reading their report.

https://www.hl.co.uk/shares/shares-search-results/i/imperial-brands-group-ordinary-10p/share-news

[DurhamBorn]

57 minutes ago, harp said:

IMB 

Bought at £4.50,sold at £34ish 15 years later same time i sold BAT,i hated selling my baccy,like losing the love of your life,incredible to me over the years.I hoped they would fall for a re-entry as the cycle ended,but never expected them to go as low.I bought a few back at £23,but bough very heavily down near the lows.Now holding my big holding once again.In everything i do i think buying and holding baccy,then selling at those tops then buying back where the best investments iv ever made.

Well apart from Mosaic 9% of family wealth in at the bottom  wish i still smoked id have a Lambert.

[DurhamBorn]

2 minutes ago, Democorruptcy said:

Just been reading their report.

https://www.hl.co.uk/shares/shares-search-results/i/imperial-brands-group-ordinary-10p/share-news

Debt should reach the point at year end where they start buy backs,i expect 5% a year so they can chip debt down as well (they could do 7% if thye wanted).I think after that divs will start to increase around 4% a year.

[Castlevania]

1 hour ago, harp said:

IMB 

Bah. Tobacco’s running away from me before I’m fully allocated.

[Hardhat]

2 minutes ago, Castlevania said:

Bah. Tobacco’s running away from me before I’m fully allocated.

Same! Still, the yield is good.