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

[Chewing Grass]

5 minutes ago, HousePriceMania said:

I recall a stat from my school days that something like 90% of Scottish people rented, mostly social housing

That made me think of New Cumnock.

[JMD]

2 hours ago, Harley said:

Early selling is not my problem and I'm good at staying with an uptrend (I get it, these days overbought can become more overbought).  The problem is not exiting early enough (and buying back well) or selling too soon (on just a dip).

The hard part is assessing whether a down trend is material enough to warrant a partial sell (and possible buy back) given the costs, timing risks, and subjectivity.  Relevant as this is primarily a yield then total return portfolio.

TBC, my performance is not bad.  I may be only say 2.5% down across everything (so including PMs and crypto) atm.  Those 20% lossess I see on some holdings may only be on the small rump holding I did not sell down earlier.  Still, they add up.

So my objectives are to (as ever) improve AUM performance while protecting some capital, reduce trading (specifically fees and timing losses), and reduce the time effort to run.

I'm likely to refine things to:

.  Hold an annuity like portfolio of good yielders with tough but still subjective buy and sell rules.  So more a buy and hold type portfolio with a focus on the monthly data and technically based sell criteria.

. The rest as a harder core trend following portfolio using mechanical stops.  A straight single buy and sell.  I need to reassess the non-tech criteria such as yield.

In essence, polarisation and segregation as I think I've been mixing the two up.

I just wish IB would get ISA transfers working as that's the perfect platform for the latter with it's market access, stop types, and fees.

PS:  Stops will be placed according to P&L rather than charts.  So trailing is key with %'s to match the stocks.

Your strategy sounds similar(?) to mine Harley, but as I don't have your trading or market skills mine will obviously be more basic. I'm not fully allocated yet because holding cash for potential BK. However the majority of my portfolio will ultimately be buy and hold and divi paying stocks, using periodic rebalancing but also tactical arbitration between major sectors. Tbh I haven't yet worked out my risk/reward within or between sectors, which troubles me because getting this wrong will harm returns. Anyway, alongside my main portfolio I will do a form of momentum trading (using approx 15% of my total funds) and plan to take the 'easy route' by initially subscribing, and learning from, a UK based fund/trust trend following service (income from trading outside a sipp/ISA can be up to £12,500 capitol gains tax free, so another good reason I think to structure investment this way, at least for my own tax situation). 

[sancho panza]

28 minutes ago, Lightscribe said:

You are right SP retention is the no.1 issue. Meagre starting pay and no achievable pension worth staying for is one thing, less experienced colleagues to help deal with with shit when things get bendy is another.

Some may cheer at that, but trust me you won’t be in the years to come. 

A good friend works in HR for a Midlands Police force.He tells me that somtimes some of the applicants were unaware they would need to be working weekends and nights.I jest not.Also thinks the move to recruiting graduates above non graduates means the recruits are often a lot less streetwise and street 'tough' for want a of a better phrase.

He obviously sees the other side when dealing with people for whom the job isn't what they expected and want out.All in all,this country streets are a lot less safe than they were 10 years ago for multiple reasons but the street savvy and quantity of police is a key contributor.

I've often felt that a lot of Chief Constables are more politicians these days than police men/women.

[HousePriceMania]

26 minutes ago, Chewing Grass said:

That made me think of New Cumnock.

Is that one of the Scottish sink estates where they moved people, who couldn't afford cars, to.  The estates had little of no facilities, miles from anywhere so they all descended into slums , full of junkies and violence ?

That reminds me of something....

 

[AWW]

5 hours ago, belfastchild said:

Its not that difficult to grasp when you think about it in terms of evolution and migrating to the most efficient way of doing things.

Have to confess I'm struggling with it. Would love to read the study.

[Lightscribe]

12 minutes ago, sancho panza said:

A good friend works in HR for a Midlands Police force.He tells me that somtimes some of the applicants were unaware they would need to be working weekends and nights.I jest not.Also thinks the move to recruiting graduates above non graduates means the recruits are often a lot less streetwise and street 'tough' for want a of a better phrase.

He obviously sees the other side when dealing with people for whom the job isn't what they expected and want out.All in all,this country streets are a lot less safe than they were 10 years ago for multiple reasons but the street savvy and quantity of police is a key contributor.

I've often felt that a lot of Chief Constables are more politicians these days than police men/women.

Yup not only that, but they’re not even trained by the police themselves, that’s all outsourced now to 3rd party contractors, then straight out into the front line. PTSD sickness is now becoming common which never was a ‘thing’ before.

[Majorpain]

1 hour ago, ThoughtCriminal said:

He's spot on. No bullshit, not afraid to call out the "expert" class as charlatans.

 

Nice recommendation from CV.

Except he's fallen for the trap of blaming purely the BOE for inflation, in reality its normal banks who take the legal tender printed BOE £'s and use the fractional reserve system to multiply that up through loans/mortgages, the majority of which are magicked up non-legal tender £'s.  

The majority of a mortgage really is made up of money magicked from thin air (that then gets charged interest on!), but it must be paid back over 30 years through some serious hard work.  One side of that deal is much more pleasant to be on than the other.

[DurhamBorn]

1 hour ago, sancho panza said:

I'd love to know how much of police budget goes on pensions and apparently ye olde Police commisoners take a decent cut of the budget as well.

More in my close retired than in my town on duty.Id say the police are the biggest troughers of them all,apart from managers at councils of course,nobody beats them,apart from maybe Local Housing Associations,now that is trough central.

[M S E Refugee]

Italian energy major agrees to pay for gas in rubles https://www.rt.com/business/555675-eni-italy-russian-gas-ruble/

[Noallegiance]

What does this mean?

[Noallegiance]

[geordie_lurch]

Increased fuel prices and shipping really starting to hit the big players

 

[Yadda yadda yadda]

27 minutes ago, DurhamBorn said:

More in my close retired than in my town on duty.Id say the police are the biggest troughers of them all,apart from managers at councils of course,nobody beats them,apart from maybe Local Housing Associations,now that is trough central.

As I imagine your close to be a bit like Don Corleone's mall those cops did well for themselves. Of course the Godfather didn't have an open cast mine at the bottom of his garden.

[Noallegiance]

5 hours ago, DurhamBorn said:

For my work,today and that headline is like when a surgeon performs a life saving operation.Decades of work and learning.The whole basis of this thread and the macro was that we were going to roll back 40 years of dis-inflation.Iv never seen so many macro indicators that were saying so on the ones i use.Yes investing and cross market is where you make your money,but the crucial work is the underlying roadmap.Im very proud of the work i did on this cycle,iv no doubt it was up there with the best macro strategists in the world,but then there arent many now.Macro tourists mostly.

Its also tinged with sadness.Millions of decent,ordinary people are suffering,and about to suffer.The cycle allowed the worst kind of polos to emerge,it allowed the left to infiltrate all institutions.I also sometimes feel my work was wasted to a large extent.I also have a feeling of "what now".I see zero understanding still of how bad this is from polos,and they are making huge policy errors.Welfare,immigration etc are some of the main problems,yet there is nobody in power saying so.

I think we look in good shape in the areas we are in still,but there is still a risk of systemic collapse.I think the most likely outcome is inflation around 5% and rates 3.5% to 4% in a couple of years,as companies onshore everywhere.

Is there any room for considering that the initial start/rotation to commodity plays is:

a) only just started rather than at the end of the 'easy money' bit and/or

b) on a hiatus given immediate conditions?

 

Also, if we get a bust, could the first part of the new cycle 'play out again' if you see what I mean? 

[ThoughtCriminal]

41 minutes ago, Majorpain said:

Except he's fallen for the trap of blaming purely the BOE for inflation, in reality its normal banks who take the legal tender printed BOE £'s and use the fractional reserve system to multiply that up through loans/mortgages, the majority of which are magicked up non-legal tender £'s.  

The majority of a mortgage really is made up of money magicked from thin air (that then gets charged interest on!), but it must be paid back over 30 years through some serious hard work.  One side of that deal is much more pleasant to be on than the other.

Bit "tomayto tomata" for me but..........

[JMD]

2 hours ago, belfastchild said:

None of the above.

Its an engineering based postgrad on future energy use/provision within framework constraints based on environmental regulations/wish lists.
Part of the coursework is a series of scenarios and you can work out which method is 'best' given the constraints and so on.
So obviously long commuting journeys will be out in the future, as you will have to balance the delta between wages locally for a similar different job and the energy required to get you the extra cash and ultimately how that extra cash is produced and what you do with it. Full lifecycle stuff.
Bang for the buck is just one input so if you need stuff flown halfway across the world it might be, in the end, the only option both cost wise and environmentally but and its a big but it would have to be critical. So for example the vegan cycling diet figures only really worked for stuff grown within an x mile radius (really goes back to human history) and not quinoa or avocadoes flown halfway round the world. Their beef diet figures were also based on US ones with huge industrial farms, which are always used to put it in a bad light. I successfully argued I live in a different country and within a mile of my house I have beef, sheep, lamb all grass fed and due to the nature of the land thats all it was suitable for, so was the most environmentally friendly option possible. For me.

I did the course to get an insight into current US university thinking and was surprised at it. Wind was mostly ignored because most of the US isnt suitable so it came down to solar and nuclear and stuff produced locally.
Most of the calculations were generic, like the stuff you see online but then you have to go and do the research for whats local to you (solar incidence maps etc) and apply it.
A lot of it echoed the surplus energy blog (although not explicity saying so) and what CP has posted on here.

I fly to Liverpool a lot for the football, sometimes I take the ferry, the ferry is nominally 'better', but if I have breakfast, lunch and dinner on it, its not. If I have to pay for parking, its not because I have to earn the money to pay for the parking etc etc.
If I fly out on a day earlier on one of the scheduled flights its better than flying out on the days closer to matchday, both financially and because if there is enough demand they put on extra flights, the extra flights are over and above what would normally happen etc etc. Its more about calculating the extra and going deeper than the average figures thrown about.

It might appear off topic but I thought it gave a good indication of the direction things may go, which to me at least, mirrors the macro picture talked about for years (onshoring, high overseas goods/food prices etc etc).

Thank you for that summary and I don't think it's necessarily off thread. However it is my perception that all those disparate topic elements are already talked about ad infinitum in MSM, etc. Ok I accept maybe those topics are only superficially discussed, and the real elephant in the room - the globalisation behemoth being fundamentally inefficient, sustained only by financialisation, low interest rates, etc, is never acknoledged.                                                                                                                                                            But Ok, give this guy his doctorate (Monty Python might say 'in the bleeding obvious'!).... Plus the subject sounds very utopian and dare I say centrist, I wonder what his dissertation thesis solution is... 'CBDC's for All?!?'....   There, back on thread!

[Lightscribe]

29 minutes ago, DurhamBorn said:

More in my close retired than in my town on duty.Id say the police are the biggest troughers of them all,apart from managers at councils of course,nobody beats them,apart from maybe Local Housing Associations,now that is trough central.

But that’s the old guard DB and it was a free for all with OT on tap with a unequalled pension at the end of it (hence why they all lasted the distance for 30 years). Finding yourself a little niche out the way in a specialist unit, booking mates off to play golf, bars and snooker tables in police stations. That’s all ended and been done away with.

The pension is fast becoming unaffordable and unreachable. People thinking they were retiring in few years suddenly finding they have to add on a decade or so. The pension changes alone had had a substantial effect of 20 year service officers and below chucking it all in and leaving.

[leonardratso]

 

blah blah blah, nothing specific or solid, blah blah, etc etc.

Pure bullcrap of the highest order.

 

[Noallegiance]

3 minutes ago, leonardratso said:

 

blah blah blah, nothing specific or solid, blah blah, etc etc.

Pure bullcrap of the highest order.

 

"Today we pledge to make everything even more expensive!"

Cruella von der Leyen, 2022.

[Chewing Grass]

1 minute ago, Noallegiance said:

"Today we pledge to make everything even more expensive!"

Cruella von der Leyen, 2022.

She is one of Klaus's bitches.

[JohnnyB]

Feels extremely similar to Covid in the media now, how the simple narrative is being formed. "House arrest to keep us all safe" has been replaced with "Brexit and Russia have caused high inflation". 

 

This is the consequence of 14 years at least now, possibly last 22. It's not going to be pretty.

[Majorpain]

22 minutes ago, ThoughtCriminal said:

Bit "tomayto tomata" for me but..........

Yeah, but its the who benefits from it that is the real meat.  All that interest on all that debt is making its way somewhere isn't it?

[Sman]

1 hour ago, Chewing Grass said:

That made me think of New Cumnock.

No that was 99.9 percent 😅

[TNS]

1 hour ago, HousePriceMania said:

Is that one of the Scottish sink estates where they moved people, who couldn't afford cars, to.  The estates had little of no facilities, miles from anywhere so they all descended into slums , full of junkies and violence ?

That reminds me of something....

 

Just had a google for that place and sounds like a right bodge!!

[HousePriceMania]

 

Guess where we all bought