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

[DurhamBorn]

35 minutes ago, ThoughtCriminal said:

Absolutely superb thread for anyone interested in the madness that is Tesla. 

 

My favourite takeaway: 

"Tesla's jumps are in the hundreds. The one-week move in Tesla was equivalent to the combined market cap of the 3 largest UK companies: AstraZeneca, Unilever & Shell." 

 

Madness. 

Highly likely crypto will lose 99.9%.Tesla 90%.Tesla wont survive if it cant issue equity at crazy prices.

Low PEs are the entry points in an inflation cycle.In one way i feel sorry for the young,yet in others i dont.We have all been there.The shrewd will be selling of course and buying cyclical sectors,but most wont,and will be jumping in more and more.Ironic they will lose everything when houses get cheaper.

Russia with the gas is likely to keep prices high for Boris's stupid COP thing to show his lunacy.

 

Trillions in bonds ,bubble stocks etc will end up chasing inflation later in the cycle.

[23rdian]

5 hours ago, DurhamBorn said:

Macron dead on the money here,unlike our dozy leaders.Fully admits transition will mean much higher prices.He is also right that it is needed to help force the change.The only missing bit is the fact its oil companies making the massive cash flows who can build renewables at scale with free cash,not debt.Those renewables only companies will be trying to raise finance in a rising rate cycle.They complained BP over paid for the wind rights,missing the point,they can and dont care,the old boys are now on the block and they have massive firepower.

https://www.ft.com/content/8385f5d8-b045-46a7-a822-47a9ba09e219

“What is happening now is ironic, because we are building a system where in the medium and long term fossil energy will cost more and more, that’s what we want [to fight climate change],” he said. “The problem is that industries and households will need to be accompanied in this transition . . . or it won’t be sustainable.”

Yes, yes it was. Kudos to those on here who stated it. DB of course.

[Axeman123]

13 minutes ago, 23rdian said:

Yes, yes it was. Kudos to those on here who stated it. DB of course.

Does anyone forsee a (short-term) shoeshine moment for oil, when every man and his dog will be singing the praises of big oil shares? The above isn't it imo, but it certainly seems like a milestone ie contrarian==>mainstream contrarian. Next would be mainstream contrarian==>mainstream, and perhaps then a sharp flush to shake out weak hands before the big run.

[Errol]

I still hold the Shell purchased at £9.78 and the BP purchased at £2.02. We are a long way from any top.

[Bobthebuilder]

11 minutes ago, Errol said:

I still hold the Shell purchased at £9.78 and the BP purchased at £2.02. We are a long way from any top.

Without knowing so, I seemed to have caught the bottom in Repsol during the sell off, 60% up quite a lot of the time. Shell not so far behind but, BP pretty much evens at the moment.

Want to say thanks once again to all the posters here, my stocks are in the best health Ive seen in years. The hive mind is really impressive.

Thank you.

[Loki]

@Cattle Prod that pic is quite something.  A key infrastructure point of the "Most powerful country in the world" and it has all the safety and appearance of some Brazilian favela  

[DurhamBorn]

1 hour ago, Errol said:

I still hold the Shell purchased at £9.78 and the BP purchased at £2.02. We are a long way from any top.

I had £8 including divis to sell BP,but im moving to £9+ now.Most returns will come from buybacks and divs.The industry best placed for the cycle was the one almost everyone sold near the bottom  .

[DurhamBorn]

10 minutes ago, Loki said:

@Cattle Prod that pic is quite something.  A key infrastructure point of the "Most powerful country in the world" and it has all the safety and appearance of some Brazilian favela  

Yeah,but those in the favela have mobiles with Vivo and send me divis and im upping their prices 

 

[Loki]

3 minutes ago, DurhamBorn said:

Yeah,but those in the favela have mobiles with Vivo and send me divis and im upping their prices 

 

Sensible move buying the carriers/service providers, seeing as the phones probably got looted off that train 

 

Edit: I bought some VIV the other day, cheers for the info on them.

[Hancock]

19 minutes ago, Cattle Prod said:

I find this interesting, because it's the kind of unrest and anarchy that scares the shit out of the elites. It's the kind if thing inflation forces. They need inflation to tackle the debt, but they need to keep handing out "don't rob me" money too. Game theory says they'll do both. This talk of tapers and interest rate rises will be short lived unless they keep handing out money. They've made a generation depended on bailout economics, and if they don't get it, they're gonna take it.

My inner anarchist loves it, my inner prepper is screaming "I'm not ready yet"!

Do wonder if we're just going to continue in the world where central banks raise interest rates a little to pretend they're competent, then when the stock markets/economy crashes it gives them a reason to print again ... rinse and repeat as they've already done!

A kind of Groundhog day economics.

 

[DurhamBorn]

2 minutes ago, Loki said:

Sensible move buying the carriers/service providers, seeing as the phones probably got looted off that train 

 

Edit: I bought some VIV the other day, cheers for the info on them.

Look good and if they drift can add more, TIMB look a good entry price as well.I prefer VIV but a few TIMB as well.About a 6% yield i think after tax on VIV and looks well covered going forward.

[Loki]

1 minute ago, Hancock said:

Do wonder if we're just going to continue in the world where central banks raise interest rates a little to pretend they're competent, then when the stock markets/economy crashes it gives them a reason to print again ... rinse and repeat as they've already done!

A kind of Groundhog day economics.

 

I think hyperinflation would happen before the rate rises had done their work

[Hancock]

12 minutes ago, Loki said:

I think hyperinflation would happen before the rate rises had done their work

Isnt the premise of a deflationary bust on the basis that the inflation created by the last 20 months worth of helicopter money turns to deflation .... thus requiring a further injection of money into the economy.

 

[Loki]

3 minutes ago, Hancock said:

Isnt the premise of a deflationary bust on the basis that the inflation created by the last 20 months worth of helicopter money turns to deflation .... thus requiring a further injection of money into the economy.

 

Yes but a whole new economic cycle, from disinflation to reflation so technically not groundhog economics 

[AWW]

2 hours ago, Errol said:

I still hold the Shell purchased at £9.78 and the BP purchased at £2.02. We are a long way from any top.

Similar here. RDSB at 863 and BP at 196. And Repsol at half of today's price. Are any of you sitting on similar gains but still finding it in yourselves to add more? I am still 50% in cash and kicking myself for not going all in at those prices.

[Hancock]

35 minutes ago, AWW said:

Similar here. RDSB at 863 and BP at 196. And Repsol at half of today's price. Are any of you sitting on similar gains but still finding it in yourselves to add more? I am still 50% in cash and kicking myself for not going all in at those prices.

On the basis a BK happens then hopefully you'll get another crack at sub £3.

Did you buy all your RDSB/BP shares at those prices?

[23rdian]

1 hour ago, Loki said:

Sensible move buying the carriers/service providers, seeing as the phones probably got looted off that train 

 

Edit: I bought some VIV the other day, cheers for the info on them.

EDIT: I see my question re yield was already covered. 

Please delete

[Hancock]

1 hour ago, Loki said:

Yes but a whole new economic cycle, from disinflation to reflation so technically not groundhog economics 

There is the possibility of things not going that route, Japan has long been trying to get high inflation.

[Loki]

3 minutes ago, 23rdian said:

What's the situation with divs on VIV at the moment. Did they get cut? The info seems all over the place on the web? Bought some, might top up too if the divs still seem okay?

No idea I just YOLO'd in, sorry,  it's worked OK for my SIPP so far though if that helps.  (ARCH, Peabody, Thungela)

[AWW]

19 minutes ago, Hancock said:

On the basis a BK happens then hopefully you'll get another crack at sub £3.

Did you buy all your RDSB/BP shares at those prices?

About 80% of my holdings. I had some small nibbles at £12 and £10 in RDSB and a few BP at somewhere above £2.

I'm at the point where I'm more worried about most of the cycle's inflation arriving very early on than I am about an impending BK. I suppose on that basis, 50% cash is probably about right.  Feeling slightly paralysed - don't want to sit on my hands, don't want to pay twice as much for something as I did last year.

[Hancock]

49 minutes ago, AWW said:

About 80% of my holdings. I had some small nibbles at £12 and £10 in RDSB and a few BP at somewhere above £2.

I'm at the point where I'm more worried about most of the cycle's inflation arriving very early on than I am about an impending BK. I suppose on that basis, 50% cash is probably about right.  Feeling slightly paralysed - don't want to sit on my hands, don't want to pay twice as much for something as I did last year.

Thats cracking timing.

As i;ve said many times i wish i went in with about 70k on BP at 290ish. If it goes back then all is good, if not then there will be other opportunities. Though oilies are a relaxing one to be invested in with a huge chunk of money as the entire economy is based on what they sell.

But look at the posts from @ThoughtCriminalearlier, now i know its twitter, but the bloke he quoted does have a point at how insane the market is right now.

 

 

 

[Barnsey]

ZH I know, but makes sense...

 

[MrXxxx]

Interesting overview on the Asia Mega developers, and how they may have to sell unfinished assets in London

https://www.reuters.com/world/china/chinas-property-woes-put-prestige-global-projects-play-2021-10-31/

 

and the first real admission that the current inflation spike may not be temporary

https://www.reuters.com/article/usa-rates-goldman-sachs/goldman-sachs-brings-forward-u-s-rate-hike-projection-by-a-year-idUSL8N2RS1DI

[HousePriceMania]

UK Bonds jump....I guess in anticipation of the BoE not raising interest rates  

 

 

 

[Barnsey]

China also going big on infrastructure spending vice consumer...