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

[Animal Spirits]

Regarding some European stocks, Bridgewater currently has short positions on a number of companies in the Stoxx 50 index.

[Calcutta]

1 hour ago, Ash4781b said:

Just interested to see their margins and how much debt they have. If we are at the start of a recession. It might be too late get crushed between collapsing demand and rising costs.

Shipping furniture means a lot of empty air in the container, putting it together in England means a lot of extra wages and there's no cunt with any money to buy it anyway. They're fucked. 

[M S E Refugee]

https://fxtop.com/en/historical-exchange-rates.php?A=1.6&C1=USD&C2=GBP&DD1=&MM1=&YYYY1=&B=1&P=&I=1&DD2=24&MM2=06&YYYY2=1980&btnOK=Go!

 

https://www.hl.co.uk/tools/calculators/inflation-calculator

I have been playing around with these two calculators and I get an inflation adjusted figure for Silver of around £120 per ounce from the 1980 peak.

Gold has tracked inflation beautifully since 1980.

@kibuc keep the the faith!

 

 

[afly]

Stealing DB predictions again? Getting a bit spooky now

https://www.telegraph.co.uk/property/buy-to-let/dont-know-how-support-family-landlords-retirement-dreams-tatters/

Quote

 

Hundreds of thousands of pension plans are at risk as the Government’s rental sector overhaul derails the buy-to-let business model, landlords have warned.

 ...

Those who sell up will get hit by inflation if they keep their savings in the bank, so former landlords could instead turn to the stock market. A stocks and shares Isa will allow them to invest £20,000 each year free of tax. Self-invested personal pensions generally have an annual contribution limit of £40,000 but allowances can be carried over for three years. Funds offer greater diversification of risk than investing in individual shares, said Ms Coles.

 

 

[Errol]

What fund do people on here buy to balance out an otherwise higher risk portfolio?

[ThoughtCriminal]

34 minutes ago, M S E Refugee said:

https://fxtop.com/en/historical-exchange-rates.php?A=1.6&C1=USD&C2=GBP&DD1=&MM1=&YYYY1=&B=1&P=&I=1&DD2=24&MM2=06&YYYY2=1980&btnOK=Go!

 

https://www.hl.co.uk/tools/calculators/inflation-calculator

I have been playing around with these two calculators and I get an inflation adjusted figure for Silver of around £120 per ounce from the 1980 peak.

Gold has tracked inflation beautifully since 1980.

@kibuc keep the the faith!

 

 

So silver has been absolute dog shit as an inflation hedge since then. Interesting.

[BurntBread]

8 minutes ago, ThoughtCriminal said:

So silver has been absolute dog shit as an inflation hedge since then. Interesting.

It was a period of time that saw the destruction of the print film industry; while now it has new industrial usage in solar panels, at least. The "problem" with silver as a currency is that it has significant other uses (I know gold turns up in electronics sometimes, but I don't think that has ever been an important consumer of the metal). Without knowing all the flows, green energy will give silver an added kick this cycle, and also make it vulnerable if alternatives in PV panels can be found.

[SCEPTICAL]

20 hours ago, leonardratso said:

ive still got my asda sid james t shirt someone got me years ago, oddly enough i saw some guy in a porno wearing the same t shirt a few months after i got it. A cheap sleazy uk porno, but i watched it anyway cos the the guy had my t shirt on.

 

So much worse than those classy continental pornos 

[M S E Refugee]

1 hour ago, ThoughtCriminal said:

So silver has been absolute dog shit as an inflation hedge since then. Interesting.

Utter dogshit unless you employ our secret weapon, namely the Gold Silver ratio!

I would be interested at what levels our chart experts would swap Gold for Silver and vice-versa.

https://www.bullionbypost.co.uk/price-ratio/gold-silver-ratio-chart/

The History of the Gold-Silver Ratio

Historically, the gold-silver ratio has only evidenced substantial fluctuation since just before the beginning of the 20th century. For hundreds of years prior to that time, the ratio, often set by governments for purposes of monetary stability, was fairly steady.

 

The Roman Empire officially set the ratio at 12:1. The ratio reached 14.2:1 in Venice in 1305 and remained at this level up until 1330 when it fell to 10:1. In 1350 it fell to 9.4:1 in some places across Europe. It climbed back to 12:1 in the 1450s.1 The U.S. government fixed the ratio at 15:1 with the Coinage Act of 1792.2

[harp]

56 minutes ago, Errol said:

What fund do people on here buy to balance out an otherwise higher risk portfolio?

Blackrock World Mining Trust BRWM. 
 

Sold my miners (Rio bhp glencore Anglo etc a month or so back. But got a first ladder in the above last week to spread the risk. Decent yield pay div 4 times a year.  But if heading for a recession I’m guessing they will fall further as they all seem to have fallen recently. If the dollar turns it should help, I think/hope. 
I’m  no Chartist though 😂

[Democorruptcy]

3 hours ago, Animal Spirits said:

Regarding some European stocks, Bridgewater currently has short positions on a number of companies in the Stoxx 50 index.

Are they just short or short to hedge positions on shares they hold?

[M S E Refugee]

EU nation calls for U-turn on fossil fuels – media https://www.rt.com/business/557813-germany-fossil-financing-energy-crisis/

[DurhamBorn]

https://www.telegraph.co.uk/property/buy-to-let/dont-know-how-support-family-landlords-retirement-dreams-tatters/?li_source=LI&li_medium=liftigniter-rhr

Just the start as well.More rate increases eating into profits if leveraged.Harder to remove tenants.Big bills for getting up to moving standards.Interesting those in the article who are "self employed" with 7 properties seem as if they rely 100% on the income from the houses,so not really self employed.£36kpa profit off the portfolio but falling 10% with each interest rate increase.They need to sell now.Waking up to the fact housing isnt a pension.

Its 100% obvious the government intend to remove small landlords.They will keep turning the screw.Lots of money will be going into the wealth managers intstead.BTL is over for most now,it simply wont be profitable enough for the grief.

[DurhamBorn]

19 minutes ago, M S E Refugee said:

EU nation calls for U-turn on fossil fuels – media https://www.rt.com/business/557813-germany-fossil-financing-energy-crisis/

 

[BWW]

On 24/06/2022 at 23:34, Harley said:

OK matey, let's take this to the mat!  I own RIO.  Have for a while and don't see that changing yet.  It's part of our diverse core (income) portfolio so not a trade.  That means I never sell out of it but do reduce my position (usually to about a third) if the technicals look poor.  That's what I've recently done which means I now need to put the extra time in to catch the turn.  That's the deal I made with Mr Market.  It pees me off because I've got better things to do but that's the game I'm given.  But because Mr Market's on a bit of a roar, I'm also adding a FUBAR stop limit for the lot.  I listen to the podcasts and I don't give a feck but they do open my mind to the possibility this could run harder.  That's all they can do, even the very best ones (yes, we know who).

I don't get 4800p or any other price.  I don't give a feck.  I buy on the basis of the chart and because I've got a busy life outside of all this stuff, that means the monthly chart.  You talk prices but you don't say why.  Why 4800p?  I'm not dissing you, I trust you've got a reason (I could see some) and that's what I want to know.  That's the value to me.  I say don't throw out numbers without an explanation.

I look at the chart and it'll tell me when to do something.  So here's that "meme" again (do y'all get it now!)...

   

What I see is this:

Yep, that's the sort of thing it takes just for the techs.  Sure, choose your data of choice but at least have something.  So we were on a bounce but it's given way (which is unusual on the monthly so spider senses about the overall market at the ready).  That's further supported by the weekly action, which usually doesn't agree (hmm).  So I'll sit it out until the turn and the price at which it does will be the least interesting thing about it.  Sure, it may go up 10% tomorrow.  I simply don't give a feck 'cause that's just noise in my scheme of things.

As for the rest, let's not fool ourselves.  Everything is a trade.  Only the duration varies. 

Again, I'm not dissing you.  I wouldn't fecking read your stuff if it was BS!  I want to know more.  To challenge myself and me ways.  That's how I might manage to stay ahead.  TBH, more an excuse to show my frillies to hopefully get some to appreciate what's required if you want to ride.

Some naive will probably ask what techs I'm using.  Don't.  No shortcuts.  That's a suit you'll have to invest in to tailor and wear.  Again, if you ain't prepared to grunt, stay the feck away.  I could name them.  Worthless, as it's how they're used.  How are they used?  Worthless as we all come at this from a different angle.  So what are you left with in the end?  A pub chat, no more.

........But then, every now and then, someone says something as an aside and it lands hard and you go "oh feckidity feck"!

No criticism about what you're doing. But I disagree that it's the only way and everything else is the wrong way. Ladders for example is frequently mentioned here as a way to remove emotion and just grab shares at a reasonable rough average that you think are going to end up higher or lower over the longer term. Not sure if you combine your TA with ladders. Using ladders is sort of accepting that the market is not rational and picking bottoms is for monkeys.

AIUI you are buying / selling based on technical analysis of market price / MMA. This is how traders buy and sell and try to get their timing right. Not very many of them are really super good at it.

I have a question about my own choices of when and what to buy [about which I put much less effort than you] ... whether I would have made more buying an index ETF. Would quite like software that extracts the purchase/sale amount and date of every trade and tells me would I have done better just buying FTSE100 or FTSE250 or FTSE all share. [I make a concious decision not to buy outside UK partly for tax simplicity].I do look at what the share price has done in the past and try to find the reason for big drops or rises. I also take a brief look at PE, book value and div history. I'd quite like to see measures in simple numbers of debt [and where that debt is, when it's due, what it costs] and [real - no intangibles - and know what they are] assets. Most of all I take a view based on what's going on in the world / country i

n which they produce and sell, where I think they will go long term.

I sometimes scan through the balance sheet to try and see what's happening and what direction it's moving. I do this more with the small and risky plays than anything FTSE100. But the measures available are mostly obfuscating. Would like to do that properly but without spending 10++ hours per stock making a detailed analysis of accounts and all RNS over a few years, I don't see how I could and even were I to spend the 10+ hours I don't think my conclusions would be of a satisfactory quality [to me].

I'd like some more RIO [now only 0.2% of portfolio value] but think there's a fair chance I'll get them a bit cheaper than now so using my lazyness to my advantage. I may one day just decide sod it I don't think they'll go down and there's big divis in the [potential] offing. They may rocket up and I continue to think nah don't fancy that expensive price. This is partly random and emotional on any day there happens to be money to re-invest or add. On balance I don't think that this is so much better or worse than any other way.

I am of course also picking a direction and taking an opinion on the business of known companies. Am I going to buy IAG? No because their product, management and prospects are all shit. Plus it's a dieing model. Worse still they own the awful vueling. Am I going to hold RR despite a 20% loss on 4% of my portfolio. Yes because I think they are a good company with a good product/workers and a future and management are moving/diversifying in the right directions using their quality engineering skills availlable. Plus UK gov are likely to prevent them ever going under. Spray and pray can have a direction too.

 

[Plan-b]

3 hours ago, afly said:

Stealing DB predictions again? Getting a bit spooky now

https://www.telegraph.co.uk/property/buy-to-let/dont-know-how-support-family-landlords-retirement-dreams-tatters/

 

Quote .. “We have consulted with landlords and will continue to work with them as we prepare legislation.”

How about continue to work with the Millions who have been priced out of buying a decent home..

"Ben Cameron*, 60, has now decided to sell his 30 buy-to-lets, a portfolio he had built to fund retirement."

Well hard luck chap, WTF you doing buying 30 BTL's? the whole thing stinks. 

Fukem.

( Possible Government U-turn in 3, 2, 1, )

[Loki]

From memory David Dreman uses Price to earnings, price to book and price to cash flow and that's about it

[Pip321]

50 minutes ago, DurhamBorn said:

https://www.telegraph.co.uk/property/buy-to-let/dont-know-how-support-family-landlords-retirement-dreams-tatters/?li_source=LI&li_medium=liftigniter-rhr

Just the start as well.More rate increases eating into profits if leveraged.Harder to remove tenants.Big bills for getting up to moving standards.Interesting those in the article who are "self employed" with 7 properties seem as if they rely 100% on the income from the houses,so not really self employed.£36kpa profit off the portfolio but falling 10% with each interest rate increase.They need to sell now.Waking up to the fact housing isnt a pension.

Its 100% obvious the government intend to remove small landlords.They will keep turning the screw.Lots of money will be going into the wealth managers intstead.BTL is over for most now,it simply wont be profitable enough for the grief.

Agree.

Lots of reasons to agree with your prediction but not least the type of person BTL seems to have generically attracted. For example a quote taken from the article re that couple with the 7 BTL’s….

“We didn’t have any money until we were in our 40s and by then it was too late to start a pension,” she said. “Our only option was property.”

Even setting aside the why’s and wherefore of BTL….anyone who doesn’t have any money until their 40s (and there are a lot of bad and good reasons for that) should not be buying multiple properties and leveraging.

Also these guys seem to think “property is their only option”….so really shouldn’t be investing their money themselves never mind borrow money and investing that.

I once watched a tv program about a ‘poor landlord’ who had bought a flat in Manchester. At the time of the repo (yep, the good old days) they were outside the building saying about the parking and location not being as promised, it not being in and area that could be let, and the price of the new build they paid bring triple comparables…just lazy (hadn’t even viewed before buying nor indeed for the first 2 years of ownership), no financial sense (no due process/comparables) and no business acumen.

I think a significant proportion of new style LLs are ill equipped to do well in a strong market with low rates….when we have a weak market with higher rates then their model just won’t work. 

[Bobthebuilder]

10 minutes ago, Pip321 said:

I think a significant proportion of new style LLs are ill equipped to do well in a strong market with low rates….when we have a weak market with higher rates then their model just won’t work. 

I do a lot of Gas safety certs for LLs with one property, they always seem to be way too emotionally attached to the house. Presume this is because it was their first home, etc, not very business minded most of them.

On the subject matter of trading shares and technical analysis. I was never any good at that stuff, did give it a go many years ago, but my brain is not wired for candles. At the beginning I just used to drip feed into my chosen investments on a monthly basis, I wouldn't do that now, but it was a good way to start and a steep learning curve.

I have a years ISA allowance in a separate account to my main ISA/SIPP that I use for trading experience, learning, practicing basically. It hasn't lost hardly anything over the last two weeks, I have no idea how I managed that.

[BadAlchemy]

This a great little thread from Doomberg... the "4 rung energy ladder". Idiot politicians and their ESG nonsense are now trying to climb up the ladder, creating more CO2 in the process, when our modern society is built on descending the ladder. Corn ethanol mixed into petrol, Germany going back to coal power etc..

How long until they are forced to deploy/redeploy the 5th, nuclear, rung I wonder...

 

 

[DurhamBorn]

3 hours ago, Errol said:

What fund do people on here buy to balance out an otherwise higher risk portfolio?

I have some Investment Trusts,Blackrock Latin America and Henderson Asian Income.

[Animal Spirits]

2 hours ago, Democorruptcy said:

Are they just short or short to hedge positions on shares they hold?

Article didn't specify.

https://www.bloomberg.com/news/articles/2022-06-23/bridgewater-doubles-bet-against-european-stocks-to-10-5-billion

https://whalewisdom.com/short_position/holder/bridgewater-associates-inc

https://hedgefollow.com/funds/Bridgewater+Associates

[HousePriceMania]

1 hour ago, DurhamBorn said:

https://www.telegraph.co.uk/property/buy-to-let/dont-know-how-support-family-landlords-retirement-dreams-tatters/?li_source=LI&li_medium=liftigniter-rhr

Just the start as well.More rate increases eating into profits if leveraged.Harder to remove tenants.Big bills for getting up to moving standards.Interesting those in the article who are "self employed" with 7 properties seem as if they rely 100% on the income from the houses,so not really self employed.£36kpa profit off the portfolio but falling 10% with each interest rate increase.They need to sell now.Waking up to the fact housing isnt a pension.

Its 100% obvious the government intend to remove small landlords.They will keep turning the screw.Lots of money will be going into the wealth managers intstead.BTL is over for most now,it simply wont be profitable enough for the grief.

They need to sell... Last year 

[HousePriceMania]

Btlers don't know how to support their family... 

 

A) what do they think their tennants can can pay retirement, how do they support their family

 

B) gets a fucking job you cunt. 

[Harley]

10 hours ago, Pip321 said:

I ''threw out a figure'' to perhaps try explain a laddering approach....but I did give one so its a fair challenge.

Charts are a science but my methodology for a precise price isn't. Your price, someone else's price and my price may well be completely different because our current objectives and current holdings are different. 

Currently have almost no exposure of my total assets in direct stocks....so my appetite is different. My objectives are therefore individual. My price is individual. I need to caveat though my current asset holding are not the norm...so whilst I do have some stocks, just they don't represent any type of real exposure in terms of %.

The balance is that my prices (for me) are tempered with a massive worry we are walking on the edge of a cliff at the moment, its raining and visibility is low...and a storm is coming. However, the contra is with almost no exposure at all I want to dip my toe in and keep ahead of cash and at my current levels I have a FOMO. 

What I do know is when Rio hit 6091 a couple of weeks ago I had a deep desire to have bought them already at a lower price. Its profits, its dividends and what it does to make money worldwide were something I wanted to be a part of....and 2 weeks ago it felt like I was going to have to pay a 'relative' premium to do so. My concern was I would be always chasing that price, if Iron Ore demands increases again then my opportunity to buy anywhere near 4000 or 5000 felt like it had gone forever (felt to me anyway)....so its FOMO. Not FOMO on a profit but rather FOMO on owning a piece of a business I really liked at a price I liked. 

So when it dropped quickly and I went in at 5181 for my first ladder and happy if that's my only one because at least I am in. However as the price falls further I set further ladders down 4805 is the next because for me that 11% yield, a worldwide exposure and a commodity based cycles is something I do not current have. So I am not necessarily bullish or bearish on that price but seeking to gain exposure at a level that I am happy with....and a level that even if it falls to 2000 I would still be happy with for a lifetime year hold. Why would I be happy if it fell to 2000 if I bought at these levels....I guess because at least I paid 5181 and not 6000. That's human, its wrong I am sure. 

Rio (and about 20 other picks, of which I will try collect 3/4/5 if they fall out of favour) I see as businesses that I would like to own to diversify my total assets. 

If I buy Rio they wont be shares on a screen but more like holding a currency type, a tangible asset, a share of a business and taking the rough with the smooth. That's the long term.....the short term is volatility and opportunity to grab 3/4/5 bargains from those 20 businesses I am tracking and try to get what I feel to be a 10/20% discount on what I might have paid....not really for short term profit but to protect against an impending dip. 

My price is for me, its not a market call and its all to do with my circumstances and what else I hold....or in reality what else I do not hold. If I already held Rio and other miners (I don't) my price would be very different.

Now its the macros that I do like.....trying to understand the tides, the flow, the patterns is really helpful. That helps me with understanding cycles and fundamentals, but at the same time I want a fairly passive hold. However then picking the price on one share (eg Rio) it relies on the CEO not being convicted of some terrible crime, some long term Ratner type faux pau or some daft over payment for a take over of another rancid business etc....

My price decision is based on where I have seen the share price in the past and where I see it going. I guess its charting but without any reliance on maths. The market is too fickle and too imprecise for me to feel I can rely on it....

I should clarify this was my price in this market. Next year my price could be quite different. 

Next time I ''throw out a figure''...I will caveat that my figure, not for others consumption and based on my own individual position. 

Nice one ta.  You mentioned ebbs and flows and for that you can't beat a momentum indicator.  Put that with a price chart and a price indicator like MACD or just moving averages and I find that's my holy trinity.

Yep, the likes of RIO are part of my inner sanctum.  Maybe I should treat all stocks as a trade and sell out on a top but I hold a bit back on these so they stay on my radar for when they turn up.  Like your first ladder (my perpetual ladder).

Price points are fine, just usually associated with supports and resistances and maybe patterns and after all, a limit order requires a price!

I use monthly charts because yes, things are wild.  They cut out the noise at the cost of being in and out a bit later.  But then less false ins and outs so maybe it's all the same in a wash.